Google Wins Landmark Advertising Case In Australia

CANBERRA (Reuters) - Google Inc won a landmark court case on
Wednesday when Australia's High Court ruled that it had not
engaged in misleading behavior with its sponsored links and that
it was not responsible for messages conveyed by paid advertisers.

The ruling helps Internet providers and search engines argue that
they are not publishers, but simply carriers of information
provided by third parties.

While the judgment applies only in Australia, the ruling will be
closely watched around the world and could be cited as a
precedent in the event of similar cases arising in the rapidly
evolving area of law.

"Others will definitely be looking at this ruling. Google is a
worldwide business. This is something of a first, and it does add
some clarity for the industry," the head of Australia's Internet
Industry Association, Peter Lee, told Reuters.

The finding ends a six-year legal battle between Google and
Australia's consumer watchdog, the Australian Competition and
Consumer Commission (ACCC), which accused Google of engaging in
misleading and deceptive conduct over paid advertisements.

The ACCC based its case on search results in 2006 and 2007, where
a search for Honda Australia would show a paid advertisement for
a Honda competitor, CarSales. The ACCC said the ads were
deceptive, as they suggested CarSales was linked to Honda Motor
Co Ltd.

Google argued that it was not responsible for the advertisements,
as it was only the conduit for the advertiser.

In a unanimous finding, five judges of Australia's High Court
ruled in favor of Google, overturning a ruling from the Federal
Court. The lower court had ordered Google to set up a compliance
program to make sure paid advertisements on its search engine
were not misleading.

The five High Court judges said Google did not create the
sponsored links and the company was not responsible for messages
in the links.

"Ordinary and reasonable users of the Google search engine would
have understood that the representations conveyed by the
sponsored links were those of the advertisers, and would not have
concluded that Google adopted or endorsed the representations,"
the court said.

Google issued a brief statement saying it welcomed the decision,
while the ACCC said it would review the judgment to see if it had
wider ramifications for Australian consumer law.

"The ACCC took these proceedings to clarify the law relating to
advertising practices in the internet age," ACCC chairman Rod
Sims said in a statement.

The legal victory comes after Google and language software maker
Rosetta Stone Inc last year settled a trademark infringement
dispute in the United States over Google advertising practices.

Rosetta had argued people searching for its products on Google
were being directed to competitors and software counterfeiters.

Google has since changed the way it displays its sponsored links
in Australia, now clearly labeling them as advertisements on top
of search results.